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Chinese antitrust authorities continue targeting trade associations

Beijing

On 8 December 2015, the State Administration for Industry and Commerce (SAIC) – one of China's three antitrust authorities – published a decision of its local office in Guangdong holding a trade association in breach of the Anti-Monopoly Law (AML). The trade association was found to have organized a "collective boycott" for its members, and thus engaged in a form of cartel-like conduct prohibited by the AML.

The members of the trade association – the Guangzhou Panyu Animation Association (GAGA) – are local game developers and other companies from the cartoon and gaming sector. As part of its activities, GAGA organizes exhibitions and shows of cartoon and gaming products.

GAGA was found to put in place an agreement whereby its signing members committed to exclusively participate in exhibitions and shows organized by GAGA, and not attend any local exhibitions or shows organized by third parties other than GAGA, unless approved by GAGA. SAIC's Guangdong office found this conduct to amount to an unlawful "collective boycott" and ordered GAGA (not its members) to pay a fine of RMB 100,000.

This may be the first case where the AML's "collective boycott" prohibition has been applied to trade associations, but it is definitely not the first or only case where a trade association has been the target of the Chinese antitrust authorities; in fact there have been a number of such cases, including in recent times.

This decision then, along with the others before it, serves as a reminder to foreign and domestic businesses alike to exercise particular care when getting involved in collective/industry-wide events, whether organized by trade associations or otherwise.